There’s Still Time to Save More for Retirement

There is still time to boost your savings. And at the same time set goals for what you can set aside next year.

While 2017 contributions to workplace plans such as a 401(k) or 403(b) have ended as of December 31, 2017, you can put money into an Individual Retirement Account until April 17, 2018.

Here is a lineup of the maximum contributions for 2017 retirement accounts:

IRA contribution (under age 50)

$5,500

IRA contribution (50 and older)

$6,500

401(k), 403(b), 457 accounts (under age 50)

$18,000

401(k), 403(b), 457 accounts (50 and older)

$24,000

Income limits

Income limits exist for some retirement accounts. Not everyone, for instance, can contribute to a Roth IRA. Contributions to the Roth are made with after-tax money, but the withdrawals during retirement are tax-free.

In contrast, with traditional IRAs the contributions are made pretax resulting in an upfront tax break, but the eventual withdrawals are taxed as ordinary income.

Roth Eligibility

To be eligible to contribute to a Roth for the 2017 tax year, here are the income ceilings:

Filing as a single:

Less than $133,000

Married filing jointly:

Less than $196,000

Married filing separately:

Less than $10,000

Retirement Plans for Small Business Owners

Self-employed and small business owners can contribute significantly more in retirement plans designed for them.

Here is a rundown of these choices and their 2018 limits:

Self-employed 401(k)

This retirement option can provide the biggest opportunity for self-employed Americans to maximize their retirement contributions. This is because an individual can fund their solo 401(k) both as an employee and as the employer.

As an employee, the retirement saver can contribute up to $18,500 in 2018 and kick in an extra $6,000 if he is at least 50 years of age. These maximums are the same for employee participants in a company-sponsored 401(k) account.

Here is what is different: as the employer, self-employed savers can contribute up to 25% of their compensation for a maximum of $55,000 in combined contributions (employee plus employer). For individuals who are 50 and older, the maximum contribution is $61,000.

SEP-IRA

This account is designed for self-employed individuals and small businesses. An individual can kick in the lesser of 25% of pay or $55,000. These contributions are tax deductible as business expenses.

A SEP-IRA can be set up for the owner as well as employees. Generally, the employer must contribute a uniform percentage of pay for each worker. The employer, however, isn’t required to make contributions every year.

SIMPLE IRA

These accounts are available for businesses with up to 100 workers.

With a SIMPLE IRA, workers can make salary deferral contributions of up to 100% of their wages, but the total can’t exceed $12,500 in 2018.